Innovation in news media: five key findings
Where are newsrooms placing their bets over the next few years?
And what do senior execs identify as the barriers to innovation and success?
These are just two of the questions explored by Dr François Nel and Dr. Coral Milburn-Curtis, as part of the 8th annual world news media innovation study, from the Innovation Research Group (IRG) and the World Association of Newspapers and News Publishers (WAN-IFRA).
Their study aims “to better understand and benchmark senior decision-makers’ responses to the challenges across the news company value chain,” with the results deriving from an online survey available in 11 languages, completed — Nel told TheMediaBriefing — by “more than 1600 decision makers in 142 countries.”
As Vincent Peyregne, WAN-IFRA’s CEO explains, their “partnership with the Innovation Research Group is an exciting example of a fruitful collaboration between an academic research team and corporate business.”
“Fostering knowledge transfer between the two environments is a high priority at WAN-IFRA,” Peyregne reveals, and “the newspaper industry benefits from more opportunities to develop open collaboration with the huge research and smart analytic capacity available in the academic world.”
Ahead of publication at the Digital Media Europe conference in Copenhagen in March, where this new study will underpin WAN-IFRA’s latest World News Media Outlook report, here are some emerging insights that we thought were worth sharing.
1. Current revenues are a mixed bag
Slides presented by Nel at The International Newsroom Summit in late November, revealed mixed fortunes for survey respondents when it came to their company revenues. Broadly speaking, the cohort was evenly split between those who were witnessing a decline, no change and an increase in their overall income.
For Nel, this conclusion “challenges the common narrative that the entire news media industry is in decline.”
“Yes, there are challenges. And, yes, specific market conditions play a role. But this much is clear: even through the global recession, there are firms large and small that have operated successfully.”
2. Different mindsets: Guards, Rangers and Pioneers
“While executives from the world’s most recognizable news brands contribute to the study,” Nel says, “their responses are anonymized.” As a result, the report doesn’t put particular organisations on a pedestal. Instead, it focuses on the qualities shown — over time — to shape the culture of different media outlets.
Through analysis of their annual datasets, Nel notes that “there are very distinct, statistically-significant differences between the choices that news media executives at financially-successful media companies make and those made by their counterparts at companies that are performing poorly.”
He has defined these different strategic mindsets as “the Guards, the Rangers and the Pioneers.” The broad characteristics for these segments were:
- The Guards: “Doggedly defend their traditional business model and are expecting at least 90 percent of their future profits to come from advertising and content sales.” About 10 percent of their previous sample belonged to this group, envisaging no real change to their existing revenue model over the next five years.
- The Rangers: “Focus on protecting their current businesses, but are also working towards to earning up to half their income from alternative sources.” This tranche represents the majority of publishers. Almost 70 percent of whom felt their company would need to earn between 10–50 percent of their income from different sources in the next half decade.
- The Pioneers: This group expects “their companies will have to earn more than half their income from sources other than traditional advertising and content sales to meet their revenue targets.” About 20 percent of the sample fell into this category, with 7.1 percent anticipating more than 70 percent of revenues will need to come from sources other than traditional advertising and content sales.
3. A long-way to go
Despite these ambitions, the 2017 results suggest that progress towards these new revenue models won’t happen overnight.
Although respondents came from a variety of different types of news businesses — and engaged in a wide range of different activities — advertising still made up nearly half of the revenues seen across these varying bodies.
“Innovation isn’t just about novel ideas,” Nel observes. “There are plenty of those.”
Instead, he says:
“I see innovation as the process of giving smart ideas legs in order to meet specific objectives. Or, more formally, the processes by which organisations transform ideas into new and improved products, services or processes in order to compete successfully.”
4. Social, Product and Visuals
To achieve this objective, respondents to the latest innovation study overwhelmingly identified editorial and products as the key areas for investment in the next year. These opportunities were seen as a much greater priority than more people-oriented efforts such as restructuring, working across organizations boundaries and developing their sales team.
Looking further ahead, social media — from both an editorial and commercial perspective — as well as content production services and revenue raising activities (such as paid for websites, events and conferences) signalled where executives felt investment should be prioritised over the longer-term.
The focus on social and digital media is perhaps not surprising given the continued dominance of the digital advertising market by Google and Facebook.
As Reuters reported last month:
“Advertising agency Zenith Optimedia, owned by France’s Publicis (PGPEF), predicts global advertising expenditure on social media will account for 20 percent of all internet advertising in 2019, hitting $50 billion and coming in just one percent smaller than newspaper ads. It expects social media to overtake newspapers comfortably by 2020.”
5. The human factor
It’s against this backdrop that Nel highlights the importance of trying to capture “the choices that news media executives make and how those relate to the practices and the performance of their firms”:
“Of course, there are some useful longitudinal demand-side studies, tracking studies into the choices and behaviours of news consumers, such as those conducted by Pew and the Reuters Institute for the Study of Journalism at University of Oxford. But there are no on-going supply-side studies into the choices news media execs make in order to exploit current opportunities and how they plan to innovate for future success.”
Nel’s research in this arena has found that over time, media executives have shifted their focus. “In the early years [of this study], the biggest concern was really about tech and systems,” he reflects. “It seems like those in charge these days are much more comfortable and confident about technological issues and emphasis now is shifting to people — understanding consumers and empowering staff.”
As a result, although executives continued to be interested in market developments, this wasn’t identified by industry leaders as the most likely barrier to organisational success.
“Yes,” Nel says, “executives are vexed by changes in advertising and the like, but they considered the Number One risk to be inside their firms.”
Specifically, the survey found, the pace of innovation troubled leaders far more than “the effects of new and emerging digital technologies, changes in consumer behaviour and economic conditions.”
“And that,” Nel concludes, “is something within the gift of news media leaders to change.”
Damian Radcliffe is the Carolyn S. Chambers Professor in Journalism at the University of Oregon, a Fellow at the Tow Center for Digital Journalism at Columbia University, an Honorary Research Fellow at Cardiff University’s School of Journalism, Media and Culture Studies and a Fellow of the Royal Society for the encouragement of Arts, Manufactures and Commerce (RSA).
He is an experienced Digital Analyst, Consultant, Journalist and Researcher — and a former Editor of TheMediaBriefing — who has worked in editorial, research, teaching and policy positions for the past two decades in the UK, Middle East and USA. Connect with him on Twitter at: @damianradcliffe.
Originally published at www.themediabriefing.com.